Core Brands, LLC v. Designer Audio Video
1:16-cv-11830
D. Mass.Apr 28, 2017Background
- Core Brands sued Designer AV, Dependable Audio (DA), Electronics Drop Ship, and others for trademark infringement and related claims; default judgment entered against Designer AV, DA, and Electronics Drop Ship awarding $200,000 damages per defendant and injunctive relief.
- After judgment, Core Brands moved ex parte under Massachusetts trustee process rules for trustee attachment against PayPal for $200,000 per defendant for funds/things in PayPal’s possession.
- Plaintiff sought ex parte post-judgment attachment under Mass. R. Civ. P. 4.2(g) and Fed. R. Civ. P. 64/69; motion lacked a certificate of service and did not establish certain required facts.
- The magistrate judge analyzed applicability of ex parte trustee process post-judgment, evidentiary requirements (including proof of a reasonable likelihood of recovery), and statutory limits on trustee process (trustee must have a usual place of business in Massachusetts).
- Court found plaintiff had default judgment (so likelihood of recovery is satisfied) but plaintiff failed to show PayPal has a usual place of business in Massachusetts, did not provide a certificate re: liability insurance, and did not meet the statutory conditions necessary for ex parte trustee process.
- Recommendation: deny the motion for trustee attachment without prejudice for failure to satisfy procedural and statutory prerequisites.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ex parte trustee attachment is available post-judgment | Trustee process may be used post-judgment; default judgment establishes likelihood of recovery | Not explicitly argued by defendants in record; court evaluates statutory limits | Court: Post-judgment trustee attachment is available, and judgment satisfies likelihood-of-recovery requirement |
| Whether PayPal qualifies as a trustee subject to Massachusetts trustee process ("usual place of business" in MA) | Cites prior findings in other cases and PayPal’s registered agent in MA as sufficient | Court requires proof PayPal has a usual place of business in Massachusetts | Court: Plaintiff failed to show PayPal’s usual place of business in MA; statutory requirement unmet |
| Whether plaintiff complied with procedural requirements for ex parte trustee process (service/certificate) | Sought ex parte relief but did not include certificate of service or necessary certifications | Court notes omissions and that notice/service rules apply in post-judgment attachments | Court: Motion deficient—no certificate of service; procedural requirements not satisfied |
| Whether plaintiff disclosed liability insurance availability as required by Rule 4.2(g) | Plaintiff did not provide certificate regarding liability insurance | N/A | Court: Plaintiff failed to provide required certificate about liability insurance; grounds to deny attachment |
Key Cases Cited
- Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 308 (1950) (due process requires notice reasonably calculated to apprise interested parties)
- McCahey v. L.P. Investors, 774 F.2d 543 (2d Cir. 1985) (pre-judgment remedies do not automatically govern post-judgment remedies)
- Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59 (1st Cir. 2002) (defaulting party concedes factual allegations supporting liability)
- Smith v. Solomon & Solomon, P.C., 714 F.3d 73 (1st Cir. 2013) (Massachusetts post-judgment collection procedures and notice requirements apply)
- Dionne v. Bouley, 757 F.2d 1344 (1st Cir. 1985) (post-judgment attachment may not require pre-attachment notice/hearing under Mathews balancing)
- Eisler v. Stritzler, 535 F.2d 148 (1st Cir. 1976) (default judgment establishes liability on well-pleaded allegations)